The Olympic Upsurge Let Li Ning Hand Over A Brilliant Report Card

After the four-year Olympic boom faded, Li Ning handed in a brilliant report card.

According to the interim performance report in 2021, Li Ning's revenue increased by 65% year-on-year, and its net profit increased by 187%. In this half a year, international brands have failed due to the "cotton incident". And in the Olympic Games and the national tide under the attack, Li Ning's sales continued to rise.

With a market value of HK $227 billion, Li Ning has steadily returned to its peak. But in the 30 years since he completed the transformation from "Olympic athlete" to "business winner", Li Ning has experienced too many ups and downs in his life.

　　 1988, on

In 1988, 25-year-old "Gymnastics Prince" Li Ning announced his retirement.

The talented gymnast, once known as the "gymnastic God", said goodbye to the venue in the same year's Seoul Olympic Games in which he was called "gymnastic God".

No one will comment on the merits and demerits of eight years' sports career. The four-year carnival, like a precise gear, drives the frequency of new people coming forth in large numbers.

However, Li Ning has reached a high level in another field.

At the Seoul Olympic Games, Li Ning's wry smile because of his mistakes was magnified by the media. When he landed at the Beijing airport, even the staff sneered at him. Only one person brought him flowers and encouragement. This man is Jianlibao's Li Jingwei.

After retiring, Li Ning faces two choices: one is to serve as deputy director of Guangxi Sports Commission; the other is to coach the national gymnastics team. But because of Li Jingwei's words, Li Ning went to Sanshui, Guangzhou, which was just Jianlibao of township enterprises at that time, and served as Li Jingwei's special assistant.

Li Jingwei told Li Ning that your name is the greatest value.

In 1990, Li Ning, wearing a white Li Ning brand sportswear, took over the flame of the Asian Games on the Qinghai Tibet Plateau. The brand of Li Ning, which has just been founded for three months, is facing the thousands of horses and thousands of soldiers of Jinjiang shoes.

At that time, Jianlibao transformed a five storey warehouse into Jianlibao clothing factory, producing Li Ning brand sportswear. In addition, Jianlibao sponsored the Asian Games with 16 million yuan, helping Li Ning win the sponsorship of the torch relay.

As the designated clothing for the torch relay of the 11th Asian Games, the Chinese national team's Asian Games award-winning clothing and the Chinese and foreign journalists' designated clothing, "Li Ning brand" sportswear accompanied the transmission of the Asian Games torch from Sanshui, Guangdong Province to the whole country.

When the Asian Games closed that year, Li Ning had received 15 million orders.

At the 1992 Barcelona Olympic Games, Li Ning appeared as a special prize collection uniform for the Chinese sports delegation, ending the history of Chinese athletes wearing foreign sportswear at the Olympic Games. After the three Olympic Games, Li Ning has always been a sponsor.

In 1994, Professor Liu Jipeng of Capital University of economics and trade put forward suggestions to Li Ning. As Jianlibao is the major shareholder of Li Ning company, and the major shareholder of Jianlibao is Guangzhou Sanshui company, the hidden danger in the ownership structure will restrict the development of the enterprise, so we should set up our own door as soon as possible.

Under Liu Jipeng's persuasion, Li Ning finally opened his mouth, and Li Jingwei unconditionally supported him. At the end of the same year, Li Ning redeemed the shares held by Jianlibao in the form of cash at the cost of 16 million yuan, and the company became independent smoothly.

After the first turning point, the development of Li Ning company has entered the fast lane, but Li Ning himself has gradually weakened the role of the manager.

In 1996, Li Ning moved the company's headquarters to Beijing, and its revenue reached 670 million in the same year. In Li Ning's opinion, his professional ability is not enough to manage an enterprise of this scale. Therefore, he merged Beijing, Guangdong and Yantai into Li Ning sporting goods group company. He served as the chairman and general manager of Li Ning sporting goods group company. The specific business affairs were fully delegated to Chen Yihong, who was the deputy general manager at that time.

The integrated company has indeed spent several years of golden growth under the leadership of Chen Yihong. In 1995, the total revenue of Li Ning reached 360 million yuan, which doubled to 650 million yuan in 1996. Under the influence of the Asian financial crisis in 1997, Li Ning still kept the revenue of 680 million yuan.

In 1997, Chen Yihong took over the position of general manager. Li Ning himself went to Peking University to continue his studies. Li Ning's brother, sister-in-law and sister-in-law withdrew from the company. Li Ning Company faded from the color of family business and officially entered the era of professional managers.

However, Chen Yihong has encountered a bottleneck after taking over. Li Ning's sales growth peaked, and it could not break through the 1 billion mark. In 2001, Chen Yihong stepped down and was replaced by Zhang Zhiyong, who was promoted by Chen Yihong.

Zhang Zhiyong graduated from Beijing Institute of Economics (now Capital University of economics and trade). After graduation, he was recruited into the company by Chen Yihong. He started as a cashier, then promoted to financial manager, and gradually got involved in financial planning at the company level.

After the second generation of professional managers took office, Li Ning's development accelerated again. In 2003, it successfully achieved the target of 1 billion sales. In 2004, a report card with a turnover of 1.27 billion and a net profit of 94 million was successfully listed.

But behind this report card, it is not Li Ning's unique style, but the rising tide of sportswear market.

In 2003, while Li Ning's sales exceeded 1 billion yuan, Nike took the first place in domestic market share for nine consecutive years; In 2004, Fengguang was listed and its market share was overtaken by Adidas; In 2005, Li Ning's revenue increased by more than 30%, but it still did not surpass the market position of the two international giants.

What's more, from 2004 to 2008, Anta's sales almost doubled every year. Li Ning's goal is to surpass Nike and Adidas, but seems to ignore the opponents behind him.

Li Ning, which is struggling to maintain the third place in the industry, has encountered the first crisis in the history of the brand, but the way through this crisis is full of drama.

　 2008, crisis

In 2008, Li Ning flew over the eaves and walls of the bird's nest and lit the Olympic torch. This time, his identity is "flying man".

It was a year when the enthusiasm for sports in China was at its highest. A song "welcome to Beijing" broadened the hearts of the people all over the country. Many people remember that they still owe Li Ning an apology, which was written into Li Ning's financial report.

Financial data show that Li Ning Company recorded a net profit of 945 million yuan in 2009, a year-on-year increase of 31%, nearly 10 times more than when it was listed. In 2010, Li Ning's net profit to his mother rose to a peak of 1.108 billion yuan, and finally surpassed ADI in terms of market share.

In the span of 20 years, the two rising of Li Ning brand come from Li Ning's own halo. Does this prove that the professional manager's line is wrong?

Back in 2004, Li Ning company, which lost the first two companies, will think about changes.

At that time, Nike was the first to discover the fashion trend of the sports market after the millennium. Anta, peak, and hongxingerke of Jinjiang Gang also went back to encircle and suppress the sinking market outside the "Five Ring Road", and "protecting three for two" has become the biggest goal of Zhang Zhiyong, the second generation professional manager of Li Ning.

Zhang Zhiyong's reform strategy is "professional + fashion". The specialty is embodied in team specialization, and a large number of elite management are airborne; Fashion is reflected in design, but it is still a straightforward way to drop high paid designers.

Unfortunately, the running in period between parachutists and veterans has not been taken into consideration by policy makers in advance, or has been deliberately ignored. Li Ning did not make conspicuous achievements from the design level, but showed the swing between fashion and sports, domestic and international from the strategic level.

In fact, it is the lack of running in that leads to the hidden danger of unclear power. In some decisions that need to be decisively taken, a delay will lead to a higher judgment.

In 2004, the focus of sports was on basketball. Yao Ming, who was fighting on the other side of the ocean, took too much attention. The business prospect of CBA was dim and started a new round of investment promotion. Although the price was as low as 10 million yuan a year, Li Yuan Wei, the leader, came to the door in person, but Li Ning refused.

Anta, who had been waiting for the opportunity, decided to sign a endorsement contract of 60 million yuan for three years with a price twice as high as the offer. This contract continued with Anta's growing history for eight years.

When Li Ning snatched back the CBA contract from Anta in 2012, he paid a price of 2 billion yuan over five years. In eight years, the price increased 20 times.

While Li Ning won back the CBA endorsement, Anta has already been a sponsor of the Chinese Olympic Committee, and the two sides have once again missed each other, which can be called a textbook case of "wrong step by step".

In 2009, Li Ning participated in the national day float parade as an Olympic champion, but he had to wear Anta sportswear. However, Li Ning covered Anta's logo with the national emblem, but the company's internal maladies could not be covered together.

The decline in performance in 2010 is the best proof. According to the annual report of 2010, the net profit of Li Ning has exceeded 400 million Hong Kong dollars by Anta; On December 20 of the same year, Li Ning's share price fell by 23% in one day, and its market value evaporated by HK $4.5 billion, which was the worst decline since its listing.

According to Global Entrepreneur, in a board resolution at the end of 2010, Zhang Zhiyong was preparing to report the annual performance to the board of directors. One director fired rudely: "don't talk about this. It's useless. I just want to know what the reason is and when it can be solved. "

What Li Ning can't accept most is that Anta's achievement of HK $35 billion is far better than that of Li Ning's HK $14 billion. "Why can Jinjiang brand catch up with us in two or three years? What are our advantages now? What's the problem? What should we do? "

This is not the second crisis of Li Ning company, because a bigger crisis is still brewing. In order to answer the founder's continuous questioning, Zhang Zhiyong has led the transformation of high-end + young.

In 2010, Li Ning started to reshape its brand and fully embraced the post-90s. In order to fit in with the brand strategy of "post-90s Li Ning", Li Ning's slogan changed from "everything is possible" to "make the change", and directly put the change into the slogan.

In 2011, Li Ning cut off all footwear SKUs with unit price below 299 yuan, and promoted its brand positioning with high price products.

However, after the 2008 Olympic year, the unified problem of all sports brands lies in the overstocking of inventory after misestimating the enthusiasm of the market, and the practice of increasing prices against the trend is too blind.

The younger transformation is criticized by the industry. It not only loses the loyalty of the post-80s, but also offends the main group of the consumer market.

In 2012, Zhang Zhiyong stepped down and Li Ning invited Jin Zhenjun as CEO. Li Ning, the third generation professional manager of Li Ning, is a Korean American. He is more aggressive and dominates the "channel rejuvenation" strategy.

From 2012 to 2014, Li Ning closed 4500 stores. The company has suffered losses for three consecutive years, with a total loss of 3 billion yuan.

Before 2010, most domestic sporting goods companies imitated Nike and Adidas to adopt the "light assets" operation mode, outsourcing production and sales, focusing on design, R & D and marketing promotion, and expanding distribution channels as the growth mode.

Li Ning has long adopted the mode of "Direct stores + franchise stores" and accelerated the expansion of distribution channels. In 2010, the number of distribution channels increased from 2526 in 2004 to 7333, while the number of direct sales channels increased from 351 to 582.

After taking office, Jin Zhenjun adopted the method of buying back the inventory of dealers at a low price. However, this kind of method can not cure the root cause, but also make the capital chain of Li Ning Company on the verge of breaking. In just two years, Jin Zhenjun stepped down from office, marking the end of Li Ning's professional manager era.

In 2014, after Li Ning returned to the post of acting CEO, the qualitative change of the enterprise finally began to brew.

　 2018, turning point

In 2018, "China's Li Ning" sub brand appeared in New York Fashion Week with the theme of "Enlightenment", which opened Li Ning's "national tide era".

On the closing day of the big show in New York, the wechat index of "Li Ning" soared by 700%; In the three days after the launch, more than 15 million tweets about Li Ning's New York Fashion week were exposed.

In the same year, more than 5.5 million pieces of clothing and more than 50000 pieces of shoes were sold out of the series, both of which sold out more than 70%.

Li Ning, who rose for the third time, did grasp the dividend of Guochao steadily. All this stems from the rectification of the company at the management level after Li Ning's return.

After regaining the management power, Li Ning changed the slogan back to "everything is possible", and then solved the aftershock of inventory crisis by building flexible supply chain and other means, and started to promote the construction of e-commerce platform.

After the fashion week of 2018, Li Ning company suddenly "understood the way" and penetrated into the shop display, design and marketing. Binding "national trend" is the key for Li Ning to enter the young consumer groups. The products of "China Li Ning" sub brand began to use a lot of traditional elements such as mountains and waters, ink and ink, seal and other traditional elements, and continued to strengthen the positioning of "new domestic products".

The data shows that in the aspect of national tide consumption, the attention after 95 is much higher than that of other groups.

In the following two years, "Li Ning China" successively landed in Paris Fashion Week 2019, New York Fashion Week and Paris Fashion Week 2020, and its positioning began to quietly transform to fashion.

At the same time, Li Ning began to emphasize the support of scientific and technological research and development on product strength. In addition to the 3% R & D investment for several years, there are series of new technology products such as "bow" and "Gu".

Three years later, consumers have no time to think about "wearing Li Ning is patriotic, is it necessary to wear Li Ning for patriotism?" they just quietly acknowledge the perfect transformation of "China Li Ning" from sports brand to light luxury fashion brand with purchasing power.

For example, "China Li Ning" shoes priced in the range of 800-1200 yuan, which is more than three times the price range of Li Ning brand 160-320 yuan“ The saying that there was no money to buy Li Ning in the past, but now there is no money to buy Li Ning "has also begun to spread on social platforms.

After ten years, Li Ning has finally completed the transformation of high-end + young in the true sense. When the new year of the Olympic Games comes, Li Ning is well prepared.

In April 2021, after the "Xinjiang cotton incident" broke out, the sales of Adidas tmall flagship store decreased by 78% year-on-year, and that of Nike decreased by 59%. In sharp contrast, Li Ning's sales increased by 72% year-on-year, Anta increased by 51% year-on-year, while the sales of China's Li Ning sub brand in tmall flagship stores in the same month even increased by more than 800% year-on-year.

The latest financial data of Nike and Adidas also verified the loss of international brands.

On June 24, Nike announced the fourth quarter results of fiscal year 2021 as of May 31. During the reporting period, Nike's revenue in Greater China was $1.933 billion, down 15% month on month.

On August 5, Adidas released the second quarter of 2021 financial report, the second quarter operating revenue reached 5.077 billion euro, a year-on-year increase of 52%, but the Greater China region became the only region of Adidas with negative income growth in the quarter, and the revenue fell sharply by 15.9% to 1 billion euro.

In addition, the national policy level has again brought good news. On July 3, the National Fitness Program (2021-2025) pointed out that by 2025, the public service system for national fitness will be more perfect, and the total scale of the national sports industry will reach 5 trillion yuan. According to the data of the National Bureau of statistics, the total scale of China's sports industry will be 2.95 trillion yuan in 2019. This means that in the next five years, the compound annual growth rate of domestic sports industry scale will be about 9.2%.

After the promulgation of the document, A-share and Hong Kong stock sports concept stocks have ushered in a collective surge.

Subsequently, the opening of the Tokyo Olympic Games brought high exposure to sports brands once every four years. During this year's Olympic Games, Li Ning sponsored two "dream teams" of China diving team and Chinese table tennis team, and two teams almost won the championship, which made Li Ning's logo on the podium many times in Anta's "encirclement and suppression" campaign.

It is worth mentioning that after the "Xinjiang cotton incident", Li Ning once encountered two no small public opinion crises. First, the limited shoes with the original price of 1499 yuan were fried to a sky high price of 48889 yuan on a certain platform, and were criticized for hunger marketing; The other is the rapid official Xuan Xiao Zhan, as a spokesman, was questioned as "disgusting consumers".

However, since March this year, Li Ning's share price has risen by more than 99%, and its revenue and net profit have also experienced a double explosion. The negative public opinion was soon submerged by the heat of the Olympic Games.

On August 13, Li Ning released the financial report for the first half of the year. According to the financial report, in the first half of the year, Li Ning's revenue increased 65% to 10.2 billion yuan, net profit increased by 187% to 1.962 billion yuan, and the net interest rate reached 19.2%.

Since taking the Guochao express, the time and place are all right, but Li Ning still needs to prove that he has a good relationship with people after the Olympic upsurge has subsided.

Because there is a question that has not yet been answered: is it Li Ning who brought about the national tide, or did it make Li Ning? In other words, is Li Ning leading the tuyere or gambling in the right direction?

The branch of fashion brand is separated from the positioning of sports brand, and the ultimate miracle of ultimate Savior is performed by the sub brand. However, the wind direction of fashion changes very fast and it is difficult to predict, and the sports trend is never changed for four years.

epilogue

Three years ending with 8 skillfully record the ups and downs of Li Ning and the sportswear giant. In the past 30 years, Li Ning has also beaten Nike and stepped on ADI, shouldering the encirclement and suppression of Jinjiang gang and defeated himself.

But it is undeniable that among the three rise of Li Ning, the blessing of the Olympic halo has not been absent. Compared with the huge crisis after "Feitian self rescue" in 2008, Li Ning today has not shown any signs of decline.

Besides, it has not reached half of the market value of Anta, its old rival.